AE 22 CHAPTER 4 PRE-LECTURE QUIZ

Which cost is NOT subtracted from selling price to calculate contribution margin per unit?

• Variable manufacturing overhead

• Variable selling expenses

• Direct labor

• Fixed Manufacturing Overhead

Which of the following statements is true?

• The higher is the production within the relevant range, the higher is the variable cost per unit

• The higher is the production within the relevant range, the higher is the fixed cost per unit

• The lower is the production within the relevant range, the lower is the total fixed cost

• The lower is the production within the relevant range, the lower is the total variable cost

________ determines the level by which sales can drop before a business incurs in operating losses.

________ is the combination of products being marketed by the company.

______ is the use of fixed cost to get higher percentage changes in profit as sales changes.